VANCOUVER -- Shares in Primero Mining Corp., which owns the San Dimas silver-gold mine in Mexico, more than doubled in trading Friday after First Majestic Silver announced a deal to buy the company.

Primero shares (P.TO) were up 15 cents at 27 cents in trading on the Toronto Stock Exchange, while shares of First Majestic (FR.TO) fell 30 cents to $8.44.

Under the deal, shareholders will receive 0.03325 of a First Majestic share for each Primero share.

First Majestic also signed an agreement with a subsidiary of Wheaton Precious Metals Corp. to end a silver streaming interest at San Dimas and replace it with a new deal based on 25 per cent of the gold equivalent production with ongoing payments of US$600 per gold equivalent ounce.

“We’re very excited to add it to our portfolio,” said Keith Neumeyer, president and CEO of First Majestic Silver, in an interview with BNN Friday.  

“It’ll be a good one or two year investment program to really turn this mine around. But we’re excited to do it. That’s our expertise." 

As part of the transaction, Wheaton Precious Metals will receive 20.9 million shares of First Majestic valued at roughly $151 million.

First Majestic put the total value of the transaction at $320 million including the shares issued to Primero shareholders and Wheaton Precious Metals as well as other payments under the deal including the repayment of Primero debt.

-- With files from BNN